Transactions in Bangladesh’s capital market have declined to an eight-month low after witnessing some stability at the beginning of the year, just after general elections.
Dhaka Stock Exchange (DSE) on Tuesday recorded lowest transactions in last eight months.
Analysts viewed this as a reflection of investors’ lack of confidence in the market.
DSE traded shares worth Tk 196.79 crore on Tuesday.
Earlier, the lowest transaction was recorded on Oct 22, 2013 when only about Tk 189 crore was traded.
Managing Director of the IDLC Investments Limited Mohammad Moniruzzaman attributed this slump, a month before the presentation of budget by the new government, to a lack of growth in the economy.
He told the bdnews24.com that investors as such have not lost confidence in the market.
“The market witnessed a slump in February. But due to some foreign investors, prices of some shares have increased. But as the economy has not revived, the investors are not able to rely on capital market.”
Moniruzzaman is also of the view that after a slew of scams, investors are now also sceptical about banking sector.
Apart from that, according to him, drop in profits of some big companies also had its impact on investment.
But the professor at Dhaka University’s Accountancy department, Mizanur Rahman, does not see any reason the confidence of investors in the market is going to be revived despite the government taking several measures after market crashed four years ago.
For this, he also pointed an accusing finger at the regulatory authority, Bangladesh Securities and Exchange Commission (BSEC).
“In the past few days some unscrupulous companies withdrew money from market and hiked the share price through manipulations. But these issues were not redressed,” Professor Mizanur told bdnews24.com.
“Market regulation has deteriorated,” he observed.
The lack of faith in the market is also reflected in the view of an individual investor Sheikh Atik Ikhtiar.
“I don’t exactly remember when I last traded in shares. How do I trade? Prices of all the shares are falling. Even if I sell a share, what will I purchase? The market is in a free fall,” he said.
For the downfall, he blamed excessive IPOs and policies of Bangladesh Bank.
“Those who apply for IPO ultimately sell it after getting it. So capital market faces money crunch. On the other hand, due to a faulty policy of Bangladesh Bank, banks can sell shares, but cannot purchase them.”
General Secretary of an organisation of individual investors Ataullah Naim also blames SEC for the current standoff.
“A cartel by misleading the people ahead of the budget is purchasing shares at a minimal price. But the regulatory authority has failed to control this,” he told bdnews24.com.
Suggesting that issuing of IPOs and right shares should be immediately stopped, Naim claimed that IPO and right shres were creating fund crisis.
Managing Director of Phoenix Securities A Quadir Choudhury told bdnews24.com: “Capital market is yet to recover from the 2010 crash. I have been advocating that huge fund is required to save the market.”
“The market is controlled by corporate houses. There is no regulator,” he alleged.
On Tuesday, DSE General Index dropped by one point to end at 4363 points.
Blue-Chip Index DS-30 increasing by 7 points from the previous day has reached 1590 points.
Share prices of 131 companies have increased, prices of 110 companies dropped and 84 remained unchanged.
On Chittagong Stock Exchange, CSE Index closed at 8429 points after registering a 16-point rise.
However, trading on this stock exchange on Tuesday was only Tk 16 crore, which is about Tk 3 crore less than what it transacted on Monday.
Source: bdnews24
